Few sectors of the stock market have rebounded quite as vigorously over the past few months as mainland property developers.
As the first of the two charts below shows, the rally has been nothing short of spectacular. Since the beginning of March, shares in a clutch of Hong Kong-listed developers, including Hopson Development Holdings and Shimao, have climbed by more than 300 per cent. Over the same interval, Greentown China has shot up by an astonishing 450 per cent.
The recovery is all the more remarkable when you consider that as recently as last December the mainland property sector was holed below the waterline, and many developers were in immediate danger of sinking for good.
As home prices rose rapidly through 2006 and 2007, lots of developers leveraged up to fund land purchases at inflated rates and to help finance new construction projects.
When the mainland authorities clamped down on bank lending and property speculation at the end of 2007 to prevent overheating, the developers suddenly began to look dangerously exposed. As sales volumes collapsed and prices subsided, they were left sitting on months' - and in some cases years' - worth of unsold apartments. With cash flows evaporating, heavy debts to service and little prospect of refinancing thanks to the credit crunch, by late last year several companies in the sector were widely expected to default and slide into bankruptcy.
And then in the nick of time, the sector was rescued. Badly spooked by the collapse in the mainland's export volumes, Beijing ordered the country's banks in December to ramp up lending in order to bump-start stalled output growth.
Since then, mainland banks have extended more than seven trillion yuan (HK$7.94 trillion) in new loans, equal to about 24 per cent of the country's gross domestic product last year.